Japan eyes Pacific trade pact concessions as talks with U.S. begin

Reuters Staff

4 Min Read

TOKYO (Reuters) - Japan could make concessions on tariffs on some sensitive farm products, a key cabinet minister said on Tuesday, as U.S. and Japanese officials began talks ahead of next-week’s high-level multilateral negotiations on a U.S.-led free trade deal.

A deal between the United States and Japan, the two biggest economies taking part in talks on the Trans-Pacific Partnership (TPP) pact, is vital if a broad agreement is to be clinched at talks among all 12 participants in Singapore from Monday.

The United States had hoped to wrap up the TPP, which aims to cut tariffs in countries forming 40 percent of the world economy and set common standards on other issues, by the end of last year.

But obstacles remain over issues including Japanese protection of sensitive agricultural products, such as rice, and U.S. automakers’ fears of increased competition from Japan.

“If we were not to move even slightly on any product line in the five categories (that Japan has vowed to protect), that would not be negotiations,” Japanese Economics Minister Akira Amari told a news conference on Tuesday.

“I don’t think anyone thinks there will be no change in any of the tariff lines.”

Washington has been pressing Tokyo to scrap all tariffs in the five categories of rice, beef and pork, dairy products, wheat and sugar. These include 586 product lines. Japanese media said U.S. pressure was especially strong on the categories of beef and pork, and dairy products.

Japan wants the United States to set a timeline for scrapping tariffs of 2.5 percent on imports of passenger cars and 25 percent on light trucks.

Japan’s politically powerful farm lobby is bitterly opposed to concessions, but Prime Minister Shinzo Abe’s government has designated the pact as a key part of a growth strategy to revive the world’s third largest economy.

Abe took office in December 2012 vowing to revive the economy with his “Three Arrows” of hyper-easy monetary policy, fiscal spending and a growth strategy including deregulation and structural reforms. So far, many investors have been disappointed with progress on the growth strategy.

“From here on, I think that the ‘arrow’ with the longest flight time will be TPP,” Chief Cabinet Secretary Yoshihide Suga told Reuters in a weekend interview.

U.S. President Barack Obama, who is set to visit Japan in April, has run into problems with his pursuit of the proposed pan-Pacific trade pact after fellow Democrats, including the top two in Congress, spoke out against approval for fast-track negotiation authority to speed the TPP talks as well as negotiations on a separate U.S. deal with the European Union.

Washington still wants to complete the TPP deal this year, a senior U.S. administration official said on Friday.

“I would not in any way suggest that we’re walking back from our commitment to TPP,” the official said. “We very much want to get that done, we’ve communicated that to Congress.”

The other countries engaged in the TPP talks are Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Ministerial meetings are scheduled to start in Singapore on February 22.